There are three common ways that buyers can secure cash these days.
The common questions I hear from my buyer clients are, “Why am I always losing to cash buyers? Where are they coming from, and how can I be one of those buyers?”
Cash buyers come from three common areas. First, there are buyers who have a secured line of credit against their retirement investment account so they don’t have to sell their investments and pay taxes. These people need to have large investments set aside.
Secondly, investors are getting creative with different business models and giving lines of credit to buyers to be sort of a private bank. They’ll either secure it against their existing home if they have a lot of equity, or they’ll have an agreement on the purchase of the home. This way is a little more complicated.
The most common way people are paying cash is by family members privately lending them cash. This is a great investment for them because most people of retirement age are looking for secure investments. It’s a pretty common thing in the investor world, and now it’s making its way into the retail real estate world. It benefits everybody. The parents/grandparents have a nice secure investment with people they know and trust, and the kids or grandkids get to move into their home.
Those are some of the most common places where cash buyers are coming from. If the third seemed like an option for you as a buyer or family member that wants to help your kids or grandkids, please reach out to me. I’d be glad to help you with how to structure that.